Editor's Note:
The S&P 500 and the small cap Russell 2000 failed to produce a very convincing bounce from their 200-dma.

I have removed TGT as a candidate. The trade never opened.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 29.75 change: -0.24

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: - 5.6%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
06/18 update: I am growing concerned that CAKE Is deteriorating. Shares underperformed on Friday with a -0.8% decline on rising volume. There is still technical support at the simple and exponential 200-dma(s) but I'm less enthusiastic about buying the dip. More conservative traders may want to abandon ship.

Earlier Comments:
Keep in mind that CAKE doesn't move very fast (at least not normally) so we'll need some patience for this trade to work. FYI: The Point & Figure chart for CAKE is bullish with a $59 target.

Current Position: Long CAKE stock @ $31.53

- or -

Long the July $33 call (CAKE1116G33) Entry @ $0.75

06/09 CAKE is bouncing from the 200-dma as expected.
06/04 More conservative traders may want to exit early. We are expecting a drop to the 200-dma.

chart:

Entry on May 20 at $31.53
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on May 19th, 2011


Dr. Pepper Snapple Group - DPS - close: 40.54 change: -0.14

Stop Loss: 39.40
Target(s): 44.90
Current Gain/Loss: + 0.7%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
06/18 update: DPS spiked higher on Friday morning only to fail at its high for the week near $41.20. It was not a very encouraging performance. I'm expecting another dip toward $40.00 and the 50-dma. I'd prefer to wait for a dip or a bounce from $40.00 before considering new positions.

Current Position: Long DPS stock @ $40.25

- or -

Long Aug $45 call (DPS1120H45) Entry @ $0.30

06/14 new stop loss @ 39.40
06/04 new stop loss @ 38.95

chart:

Entry on June 3 at $40.25
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 2.1 million
Listed on May 14th, 2011


Ecolab Inc. - ECL - close: 53.95 change: -0.37

Stop Loss: 52.45
Target(s): 57.00, 59.90
Current Gain/Loss: + 1.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/18 update: ECL just finished its third week in a row where the stock struggled to make any progress past the $55.00 level. Friday's relative weakness is a bit worrisome. Once again ECL looks like it might dip toward what should be support near $53.00. I am not suggesting new positions at this time. The simple 50-dma has risen to $52.68 and I'm adjusting our stop loss to $52.45. I am not suggesting new positions at this time.

Current Position: Long ECL stock @ 53.35

- or -

Long July $55 call (ECL1116G55) Entry @ $0.60

06/18 new stop loss @ 52.45
06/04 new stop loss @ 51.90

chart:

Entry on May 26 at $53.35
Earnings Date 07/26/11 (unconfirmed)
Average Daily Volume: 1.5 million
Listed on May 18th, 2011


Nanometrics Inc. - NANO - close: 16.33 change: -0.31

Stop Loss: 15.85
Target(s): 19.25, 22.00
Current Gain/Loss: - 2.9%
Time Frame: 6 to 8 weeks or more
New Positions: see below

Comments:
06/18 update: Bingo! I cautioned readers to expect a dip near $16.00 and its 50-dma. NANO delivered that dip on Friday. We can use this pull back as an entry point to launch positions with our stop loss at $15.85. If we get stopped out we might want to try again as NANO should have additional support near $15.00 and its 200-dma.

We'll start with multi-week targets at $19.25 and $22.00. FYI: NANO does have options but the spreads are so wide I wouldn't trade them.

Current Position: Long NANO stock @ $16.82

chart:

Entry on June 13 at $16.82
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume: 467 thousand
Listed on June 11th, 2011


BEARISH Play Updates

Aon Corp. - AON - close: 49.39 change: -0.12

Stop Loss: 52.05
Target(s): 47.00
Current Gain/Loss: + 4.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/18 update: AON tried to rebound on Friday but the stock failed at the $50.00 level Friday morning. It would seem the path of least resistance is now down. Please note that I am adjusting our exit target to $47.00.

Earlier Comments:
Our target is the $46.50 level.

(small positions only)

Current Position: short AON stock @ 51.61

06/18 adjusted exit target to $47.00
06/16 planned exit, June $50 put @ +11.1%
06/16 new stop loss @ 52.05
05/31 New stop loss @ 52.75
05/23 gap down entry @ 51.61

chart:

Entry on May 23 at $51.61
Earnings Date 07/29/11 (unconfirmed)
Average Daily Volume: 1.7 million
Listed on May 21st, 2011


AO Smith Corp. - AOS - close: 40.04 change: +0.82

Stop Loss: 42.05
Target(s): 36.00, 33.00
Current Gain/Loss: - 0.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/18 update: Not one but two analyst firms had positive comments to say about AOS on Friday morning. Maybe that's why the stock gapped open higher above the $40.00 level and tried to rally past its 200-dma. One firm raised their price target while another upgraded the stock. The close above $40.00 is technically bullish but AOS' inability to breakout and close above the 200-dma is still bearish.

I am not suggesting new positions at this time. Let's wait and see if this rally fails or not. More conservative traders will want to seriously consider lowering their stop down toward the $41.00 level or down to the 50-dma.

FYI: The Point & Figure chart for AOS is bearish with a $33 target. Traders should also note that the most recent data listed short interest at 5% of the relatively small 38.2 million share float. That does raise the risk for a possible short squeeze and explains the volatile rallies in this stock.

NOTE: AOS does have options but the spreads appear too wide for us to trade them.

Current Position: short AOS stock @ $39.92

chart:

Entry on June 6 at $39.92
Earnings Date 07/20/11 (unconfirmed)
Average Daily Volume: 312 thousand
Listed on June 4th, 2011


Ford Motor Co. - F - close: 12.77 change: -0.06

Stop Loss: 13.85
Target(s): final target @ 12.55
Current Gain/Loss: +11.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/18 update: I am repeating my earlier comments that more conservative traders may want to take profits now. Ford is oversold and due for a bounce. The stock underperformed again on Friday but not enough to hit our final exit target at $12.55. If you choose not to exit then cautious traders might want to lower their stop toward the $13.55 level instead of our stop at $13.85.

I am not suggesting new positions at this time. The plan was to keep our position size small to limit our risk.

Small Positions!

Current Position: Short F stock @ $14.40

- or -

Long July $15 PUT (F1116S15) Entry @ $0.90

06/16 new stop loss @ 13.85
06/13 New stop loss @ 14.26. Final target at $12.55
06/13 Take Profits Now! Ford @ 13.14 (+8.75%), Option @ $1.89 (+110%)
06/11 new targets at $12.75 and TBD.
06/11 new stop loss @ 14.55
06/08 new stop loss @ 15.01

chart:

Entry on May 25 at $14.40
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 57 million
Listed on May 24th, 2011


Honeywell Intl. - HON - close: 55.85 change: -0.50

Stop Loss: 59.05
Target(s): 54.00
Current Gain/Loss: + 3.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/18 update: HON's rally attempt on Friday morning failed at the $57.00 level. Shares underperformed by closing down -0.88%. I am not suggesting new positions at current levels. More conservative traders may want to lower their stops near the $58.00 level. I am adjusting our stop to $59.05.

Earlier Comments:
We do want to keep our position size small to limit our risk.

- Small Positions -

Current Position: short HON stock @ 57.65

- or -

Long July $55 PUT (HON1116S55) Entry @ $0.75

06/18 new stop @ 59.05

chart:

Entry on June 2 at $57.65
Earnings Date 07/22/11 (unconfirmed)
Average Daily Volume: 4.1 million
Listed on June 1st, 2011


Johnson Controls Inc. - JCI - close: 37.11 change: +0.83

Stop Loss: 38.25
Target(s): 33.75, 31.00
Current Gain/Loss: - 2.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/18 update: JCI outperformed the market's major indices on Friday with a +2.2% gain. The rally stalled at its exponential 200-dma, which has been both support and resistance in recent weeks. I would use this bounce to resistance as a new entry point for bearish positions. I am suggesting we keep our position size small to limit our risk. Our first target is $33.75. FYI: The Point & Figure chart for JCI is bearish with a $33 target.

-Small Positions Only-

Current Position: Short JCI stock @ $36.36

- or -

Long July $35 PUT (JCI1116S35) Entry @ $0.90

chart:

Entry on June 16 at $36.36
Earnings Date 07/25/11 (unconfirmed)
Average Daily Volume: 4.4 million
Listed on June 15th, 2011


Kohl's Corp. - KSS - close: 50.13 change: +0.15

Stop Loss: 51.75
Target(s): 47.50, 45.25
Current Gain/Loss: - 0.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/18 update: KSS briefly traded above the 10-dma on Friday morning but the rebound reversed under the $51.00 level. Currently we have a stop loss at $51.75. More aggressive traders may want to use a wider stop loss and place their stop above $53.00 since the 50-dma and 200-dma near $53 should be significant resistance.

I am suggesting that readers wait until we see how KSS performs on Monday before we initiate new positions.

The plan was to keep our position size small to limit our risk. FYI: The Point & Figure chart for KSS is bearish with a $43 target.

- Small Positions-

Current Position: short KSS stock @ $49.80

- or -

Long July $47.50 put (KSS1116S47.5) Entry @ $0.75

chart:

Entry on June 13 at $49.80
Earnings Date 08/11/11 (unconfirmed)
Average Daily Volume: 4.1 million
Listed on June 11th, 2011


Marriott Intl. Inc. - MAR - close: 33.15 change: -0.20

Stop Loss: 36.55
Target(s): 33.65, and 30.50
Current Gain/Loss: + 6.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/18 update: There is no change from my prior comments on MAR. The stock looks oversold and due for a bounce. More conservative traders may want to just take profits now and exit completely. I suspect the oversold bounce could reach the $35 level or the 50-dma. I'm adjusting our stop loss down to $36.05. I am not suggesting new positions at this time.

Current Position: Short MAR stock @ $35.39

- or -

Long July $33 PUT (MAR1116S33) Entry @ $0.60

06/18 new stop loss @ 36.05
06/13 1st Target Hit @ $33.65 (+4.9%), Option @ 0.90 (+50%)
06/13 New stop loss @ 36.55
06/11 Adjusted exit targets to $33.65 and 30.50

chart:

Entry on June 8 at $35.39
Earnings Date 07/13/11 (unconfirmed)
Average Daily Volume: 3.7 million
Listed on June 7th, 2011


Charles Schwab - SCHW - close: 15.91 change: +0.02

Stop Loss: 17.55
Target(s): 15.25
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see trigger

Comments:
06/18 update: SCHW closed virtually unchanged on Friday's session. The early morning rebound attempt stalled at the 10-dma. Aggressive traders may want to launch positions now or use a trigger $15.70 as an entry point for bearish positions. I am suggesting we wait for a bounce back toward overhead resistance and launch positions at $16.75 instead. If triggered we'll use a stop loss at $17.55 and aim for a drop to $15.25. This could take several weeks but we do not want to hold over the mid July earnings report.

Trigger @ 16.75

Suggested Position: short SCHW stock @ $16.75

- or -

Buy the July $17.00 PUT (SCHW1116S17)

chart:

Entry on June x at $xx.xx
Earnings Date 07/18/11 (unconfirmed)
Average Daily Volume: 10.2 million
Listed on June 13th, 2011


St. Jude Medical - STJ - close: 48.19 change: +0.21

Stop Loss: 51.05
Target(s): 47.00, 45.75
Current Gain/Loss: + 5.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/18 update: Positive analyst comments on Friday morning helped lift STJ but the rebound failed near $49 and the stock's trend of lower highs continues. I am not suggesting new positions at this time. Our first target to take profits is at $47.00.

Earlier Comments:
We wanted to keep our position size small (about half or less than a normal trade) to limit our risk.

(Small Positions)

Current Position: Short STJ stock @ 51.00

06/16 exit June $50 put @ $1.95 (+95%)
06/15 prepare to exit our June $50 puts on Thursday at the close
06/04 New stop loss @ 51.05, added second target at $45.75
05/23 New stop loss @ 52.26

chart:

Entry on May 20 at $51.00
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 2.6 million
Listed on May 16th, 2011


CLOSED BEARISH PLAYS

Target Corp. - TGT - close: 46.53 change: +0.08

Stop Loss: 50.15
Target(s): 45.15
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
06/18 update: I am giving up on TGT. The trend is down but I don't want to chase the stock at current levels. Readers can keep it on their watch list. Our plan was to open bearish positions on a bounce near resistance but the trade never opened.

Trade never opened!

chart:

Entry on June x at $xx.xx
Earnings Date 08/18/11 (unconfirmed)
Average Daily Volume: 7.1 million
Listed on June 4th, 2011